Since 1977, Jon Michael Probstein has assisted people and businesses in all matters. In accordance with the Rules of Professional Conduct, this may be deemed "Attorney Advertising". Nothing contained herein should be construed as legal advice. Always consult a lawyer regarding any matter. Call 888 795-4555 or 212 972-3250 or 516 690-9780. Fax 212 202-6495. Email jmp@jmpattorney.com

Wednesday, February 22, 2017

UNEMPLOYMENT INSURANCE - FROM THE COURT OF APPEALS

"The order of the Appellate Division should be reversed, with costs, and the matter remitted to that court with directions to remand to respondent for further proceedings in accordance with this memorandum. Yoga Vida NYC, Inc. operates a yoga studio in Manhattan. It offers classes taught by both staff instructors and non-staff instructors, and classifies the latter as independent contractors. In May 2010, the Commissioner of Labor issued a determination that Yoga Vida was liable for additional unemployment contributions, effective October 1, 2009, based on its finding that the non-staff instructors are employees. Yoga Vida disputed that determination. A hearing was held before an Administrative Law Judge (ALJ), who sustained Yoga Vida's objection, concluded that the non-staff instructors are independent contractors and overruled the determination. The Commissioner appealed the ALJ's decision to the Unemployment Insurance Appeal Board. The Board overruled Yoga Vida's objection, reversed the decision of the ALJ, and sustained the Commissioner's initial determination that Yoga Vida is liable for additional unemployment contributions. Yoga Vida appealed to the Appellate Division, which affirmed the determination of the Appeal Board, holding that "[o]verall, despite the existence of evidence that could result in a contrary result, the record contains substantial evidence to support the Board's decision that Yoga Vida had sufficient control over the instructors' work, thereby allowing for a finding of an employer-employee relationship" (119 AD3d 1314, 1315 [3d Dept 2014]). "[S]ubstantial evidence consists of proof within the whole record of such quality and quantity as to generate conviction in and persuade a fair and detached fact finder that, from that proof as a premise, a conclusion of ultimate fact may be extracted reasonably — probatively and logically" (300 Gramatan Ave. Assoc. v State of Div. of Human Rights, 45 NY2d 176, 181 [1978]). Here, because the record as a whole does not demonstrate "that the employer exercises control over the results produced and the means used to achieve the results" (Matter of Hertz Corp. [Commissioner of Labor], 2 NY3d 733, 735 [2004] [internal citation omitted]), the Board's determination that the company exercised sufficient direction, supervision and control over the instructors to demonstrate an employment relationship is unsupported by substantial evidence. The non-staff instructors make their own schedules and choose how they are paid (either hourly or on a percentage basis). Unlike staff instructors, who are paid regardless of whether anyone attends a class, the non-staff instructors are paid only if a certain number of students attend their classes. Additionally, in contrast to the staff instructors, who cannot work for competitor studios within certain geographical areas, the studio does not place any restrictions on where the non-staff teachers can teach, and the instructors are free to inform Yoga Vida students of classes they will teach at other locations so the students can follow them to another studio. Furthermore, only staff instructors, as distinct from non-staff instructors, are required to attend meetings or receive training. The proof of incidental control relied upon by the Board, including that Yoga Vida inquired if the instructors had proper licenses, published the master schedule on its web site, and provided the space for the classes, does not support the conclusion that the instructors are employees. Similarly, in this context, the evidence cited by the dissent, including that Yoga Vida generally determines what fee is charged and collects the fee directly from the students, and provides a substitute instructor if the non-staff instructor is unable to teach a class and cannot find a substitute, does not supply sufficient indicia of control over the instructors. Furthermore, that Yoga Vida received feedback about the instructors from the students does not support the Board's conclusion. "The requirement that the work be done properly is a condition just as readily required of an independent contractor as of an employee and not conclusive as to either" (Matter of Hertz Corp., 2 NY3d at 735 [internal citation and quotation marks omitted])."

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Jon Michael Probstein, Esq.

About Me

Since 1977, my practice consisted of representing and assisting people and businesses in all matters, including public and private corporations, on both a civil and criminal level. My services have included public offerings, proxy fights, securities regulation, all phases of civil and criminal litigation, family law, estate law, guardianships, negotiation and drafting of a wide variety of agreements and transactions, in addition to general advice with regard to the customs and practices within various industries. I was also a Guest Commentator on COURT TV and an arbitrator. I am admitted to practice in New York and the federal courts, Southern and Eastern District, as well as the Second Circuit Court of Appeals. Currently, I am special counsel to law firms in Los Angeles and New York, as well as operating my own office in Nassau County. I regularly perform pro bono work for the Volunteer Lawyers Project, Nassau/Suffolk Law Services, Inc. and the NYS Unemployment Insurance Appeals Board and I am a member of the LAP Committee of the Nassau County Bar Association. I also have a blog that discusses common legal problems which you can visit at http://jmpattorney.blogspot.com/